Correlation Between Adynxx and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Adynxx and MGIC Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Adynxx and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adynxx Inc and MGIC Investment Corp, you can compare the effects of market volatilities on Adynxx and MGIC Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Adynxx with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adynxx and MGIC Investment.
Diversification Opportunities for Adynxx and MGIC Investment
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adynxx and MGIC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Adynxx Inc and MGIC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment Corp and Adynxx is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Adynxx Inc are associated (or correlated) with MGIC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC Investment Corp has no effect on the direction of Adynxx i.e., Adynxx and MGIC Investment go up and down completely randomly.
Pair Corralation between Adynxx and MGIC Investment
If you would invest 0.01 in Adynxx Inc on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Adynxx Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Adynxx Inc vs. MGIC Investment Corp
Performance |
| Timeline |
| Adynxx Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MGIC Investment Corp |
Adynxx and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adynxx and MGIC Investment
The main advantage of trading using opposite Adynxx and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adynxx position performs unexpectedly, MGIC Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MGIC Investment will offset losses from the drop in MGIC Investment's long position.The idea behind Adynxx Inc and MGIC Investment Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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